When I hear people explain network marketing, they’ll often use an example about recommendations. They’ll say something like, “Network marketing is just like what you do every day when you recommend something to a friend. You learn that you friend is looking for a better hand lotion, so you recommend a brand that you like. Network marketing is the same.”

No, it’s not.

There is one critical difference: In network marketing, if you make a recommendation for a product and you’re signed up with the company, you get paid.

If you’re just recommending a major brand dish soap that seems to work for you, you don’t get paid. Your friend can go to the local grocery store and buy it. But if you instead think to yourself, “Hummm, if I recommend this other product, the one for the network marketing company that I’m signed up with, then I get paid for making the recommendation if they buy.”

This is known as a conflict of interest. The friend may only recommend the alternate product because they are signed up with the network marketing company, and they sell the product, and they’ll get paid if the can get the sale. This is very different than saying, for example, “Yes, I loved that movie! You should go see it.” See? You don’t get paid if your friend then goes and sees the movie.

So when you hear someone try and explain network marketing to you in this way, ask them about the conflict of interest.

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on Wednesday, April 9th, 2014 at 8:48 pm and is filed under Business.
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